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529 Plans

The Glovers may also want to look into 529 plans to save for college education expenses on a tax-free basis. When Congress passed the Small Business Job Protection Act of 1996, a provision was included to make it easier for families to save for college. Named after a section of the Internal Revenue Code, the Qualified Tuition Program (QTP), or 529 plan, formally recognized the need for families to save for college by authorizing terrific features like tax-deferred accumulation and favorable tax treatment of qualified withdrawals. These plans are broadly available for college savings programs and prepaid tuition programs.

Most 529 plans have the following significant tax advantages in common:


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